My Insurance Company Refuses to Pay the Body Shop’s Repair Estimate! What Can I Do?

Insurance companies and Body Shops can disagree on the total costs of repairs. If this happens during your repairs, it does not have to be your problem! But there are steps you may want to take in order to avoid delays or additional costs.

Your car has suffered damage for which you have made a claim with an insurance company, either your own (covered under your comprehensive or collision coverage), or with the insurance company for the person responsible (covered under their liability coverage). You’ve selected a shop to complete the repairs. The body shop has written their estimate, and now the insurer claims that they want too much money and is refusing to pay for all of the costs the body shop claims are necessary. The dispute is now holding up the repairs and you are caught in the middle. What can you do?

These types of disputes usually arise when the insurance company takes a position that the body shop can complete the work for less money than the body shop says it needs. Issues such as the rate charged per hour of labor or material costs, the labor time needed to complete specific repair operations, or whether or not a part can be repaired or should be replaced.

These disputes can often be ugly. Often times, there is bad blood between the two parties that can pre-date your repair. The insurer or the shop can enter the repair negotiations with agendas and issues that have nothing to do with you. The important thing is to not be placed in the middle, by either the body shop or the insurance company.

When this issue arises, it is smart to recognize the obligations that both parties have to you, as their customer. The body shop, in taking the repair job, should have been fully aware that they would need to come to terms with the insurer. They most likely advertise that they do insurance work, as the vast majority of body shops do. Unless they discussed the potential issue with you prior to taking the job, then they are obligated to work with the insurer and leave you out of it.

Similarly, the insurance company has an obligation to work with the repair shop of your choice. Unless they informed you of a potential issue prior to the work being started, they have an obligation to come to terms with the body shop, and make sure the repairs are not held up, due to their inability to do so.

In extreme circumstances, the insurer could take the position that they have met their obligations to you by offering a fair price for the repair costs. They may feel that the repair shop price is not fair and above what the local market bears. They may ask you to shoulder the burden of any additional costs. On the flip side, the body shop may refuse to continue the repair work until they are paid their price. This could delay the repairs, depriving you of your vehicle and potentially adding additional rental and storage expenses.

Here are some steps to consider taking should you be forced to get involved in this type of dispute:

• Forcefully and calmly, remind both sides of their obligations to you. Tell them you expect them to work out their differences and leave you out of it. Your concern is to have the repairs done right and to get your car back quickly

• If you feel that the body shop is being unreasonable, you can agree to let the insurer move the car to an alternate body shop you are comfortable with. You should only agree to this if all costs are paid for including the current body shop charges and any storage and towing charges incurred.

• If you feel the insurer is being unreasonable, seek out a manager in the claims department. Express your concerns and position. If the adjuster assigned to the claim is being unreasonable, request another adjuster or ask them to hire an independent adjuster to get involved.

• At some point, it may be smart to pay the difference in order to make sure that the repairs are not delayed. This is particularly important if you are incurring out of pocket rental costs. There is no guarantee that the insurer will pay for rental during repair delays over these types of disputes, especially if they do not feel responsible. Be careful not to be stuck with even more costs than you need to be.

• Should you incur out of pocket costs due to repair delays, make it clear to both the insurer and body shop that their inability to work together to find a solution, has cost you and you will take action to be reimbursed after the repairs are completed.

Ultimately, if you have found that you were required to pay for the difference in repair costs, or that you did incur other out of pocket expenses, such as rental, then you can also pursue these additional avenues of resolution:

1. If you used your own insurance for the repairs, review your policy contract for any clause that addresses disputes in the amount of damages. These clauses are universal in auto policies and are usually called “appraisal clauses”. By simply invoking this clause in writing to the insurer, you may prompt a resolution. The process normally requires you to hire your own appraiser to establish a fair amount for the damages. This person will then work with the insurer’s appraiser to resolve the amount. If needed, a third, independent appraiser is brought in to decide the matter. You will have to pay for your own costs here, so make sure it makes economic sense to you, prior to pursuing this route.

2. Make a complaint to the appropriate state agency that regulates the vehicle repair and/or insurance industries in your state. These are typically called the “Bureau of Automotive Repair” and the “Department of Insurance”. They may be able to help you by intervening on your behalf to resolve the dispute. Most of these state regulatory agencies have simple dispute resolution processes that cost nothing and often times can be very effective.

Most insurers and body shops are keenly aware of the need to deliver high levels of customer service. Disputes in repair costs are usually bad business on both ends. If you do get involved in this type of situation, being informed of where you stand, and what you can do, will allow you to avoid unnecessary costs and delays.